British American Tobacco Plc, the maker of Lucky Strike and Pall Mall cigarettes, reported nine-month revenue growth that beat analysts’ estimates as price increases offset dwindling cigarette sales.
Revenue rose 4.2 percent in the nine months through September, excluding currency swings, BAT said in a statement Wednesday. Analysts expected a 3.1 percent increase, according to the median of 13 estimates compiled by Bloomberg News.
As global cigarette consumption wanes, London-based BAT is investing in emerging markets and new nicotine products. The company is paying about 1.7 billion pounds ($2.6 billion) to buy out minority investors in Souza Cruz SA, the dominant tobacco company in Brazil, one of the world’s largest cigarette markets. It’s also racing Philip Morris International Inc. to develop products that go beyond conventional cigarettes. BAT bought Polish e-cigarette leader Chic and formed a nicotine vapor- product research alliance with Reynolds American Inc. in September.
The company sold 1.8 percent fewer cigarettes in the nine- month period, compared with a 2.9 percent drop in the first six months of the year. Analysts estimated a nine-month decline of 2.4 percent.
BAT said it remains confident of delivering another year of good earnings growth, excluding the impact of currency swings.
“Performance will moderate in the final quarter partly due to a strong comparator and the impact of the deterioration in exchange rates,” Chief Executive Officer Nicandro Durante said in the statement.
Total sales fell 6.5 percent. Earlier this year, BAT invested $4.7 billion in Reynolds to maintain its stake in the U.S. tobacco company, which has bought Lorillard Inc.
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